Kenya. Urgent: Protect pension funds
How safe is your pension? I think Kenyans who contribute money to individual pension schemes are badly exposed.
Last week, a whistle-blower, who is an employee of a leading pensions administrator, visited my office, where he proceeded to dump a heap of documents including multi-year audited accounts, balances of member contributions and statements of individual contributors.
The whistle-blower’s intention was to show me how the directors of the company had devised clever schemes to steal hard-earned savings of unwitting contributors. I agreed to listen to the presentations as the assets at risk are huge: The money under management is in excess of Sh1 billion and the number of people whose savings are exposed is also massive.
The documents show the number of citizens who have been painstakingly forking out part of their earnings every month and handing it over to an administrator to invest on their behalf number 3,200. Briefly, occupational pension schemes are sponsored by companies, whereby employers make monthly deductions on salaries of employees and then hand it over to service providers — fund managers, custodians and administrators. Appointment of these service providers must be approved by the Retirement Benefits Authority (RBA).
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